First Solar, Inc. (NASDAQ:FSLR), which is constructing a solar plant in the west of New South Wales for energy provider AGL, is skeptical about its future investment in Australia due to ambiguity over the government’s Renewable Energy Target, says a report from ABC.
First Solar expecting change in RET targets
The project taken up by First Solar, Inc. (NASDAQ:FSLR) is worth $450 million, which would power as many as 50,000 homes. According to Jack Curtis, vice president of First Solar, the scenario had changed a lot compared to eight months ago, when the former federal government announced the project.
“Those projects … reached financial close in a different political and business environment which was almost a year ago now,” Mr. Curtis said. He added that everything changed radically after the elections, which are building an environment of uncertainty for similar future projects.
Curtis noted that the coalition government is re-examining the Renewable Energy Target (RET), which is currently expected to produce 20% of Australia’s total energy by clean sources by 2020.
Curtis says that outlook of the First Solar, Inc. (NASDAQ:FSLR) is not encouraging over the next five years. He stated that the five years should be examined from a broader policy backdrop perspective, and such projects should be valued against the investments to be made.
Spending on renewable technology down
A review will be taken up this year, and the experts will focus more on the effect that RET would have on home and industry power bills. According to the report of ABC, the cost of the RET ranges somewhere between 1% and 5% of the power bills.
Burchell Wilson, chief economist of the Australian chamber of commerce, said that the policy is a flop and should be closed. He said that the cost is at 5%, and it is unknown that how much it will increase in 2020.
“This thing is set to double in terms of the amount of renewable energy they’re forcing on consumers.”
A United Nations report stated that the investment in renewable technology dropped globally by 14% or about $AU38 billion last year. In Australia, investment was flat at $AU4.7 billion. Kane Thornton, Clean Energy Council spokesman said that drop in the investment is due to high return that investors were getting. The cost of renewable technology has dropped, which is exciting, as the cost of building a wind farm would drop further.